In this week's issue of New York magazine, Andrew Goldman dissects Annie Leibovitz's debt problems in his article, "How Could This Happen to Annie Leibovitz?" Leibovitz, one of today's most successful photographers, has about $24 million in debt.
Goldman discredits the idea that the so-called "gay tax" left Leibovitz unable to inherit her partner Susan Sontag's estate without paying significant taxes. Most of Sontag's estate, he says, went to Sontag's son, not to Leibovitz.
Relying mainly on interviews with those who have worked with her, Goldman argues that the real cause of Leibovitz's debt is her tendency to spent outrageous amounts of money while on assignment, partly driven by her work ethic. "Leibovitz's perfectionism led her to pay little or no attention to budget restrictions, and she spent money recklessly, losing cameras, accruing parking tickets, and even abandoning rental cars," he writes. She also purchased millions of dollars worth of real estate. Meanwhile, estimates of her million-dollar contracts have been overblown, Goldman says.
Two other similar cases also come to mind: Michael Jackson and Thomas Jefferson. TMZ reports that despite a $1 billion-plus net worth, Jackson had less than $1 million in cash at the time of his death—and around $323 million in debt related to his Neverland ranch. As for Thomas Jefferson, author of the Declaration of Independence and third president of the United States, he died so deeply in debt that his family had to sell his estate, Monticello. During his life, though, Jefferson lived a life of wealth on his farm in Virginia.
In all three cases, the celebrities in question spent far more than they earned, and eventually, those habits caught up with them. What is it is about fame that seems to render people's financial decision-making skills inoperable? Do they feel the need to keep up appearances and live the high life, even when they can't afford it? Or are they just as likely to go into debt as the rest of us, it just happens to them on a bigger scale?
I think it must be a little of both. Most people can't get so deeply embroiled in debt because lenders refuse to give them so much money. In Jefferson's case, his reputation kept creditors from coming after him, and American Express made a special exception to get Leibovitz, whose application had previously been turned down, a credit card. At the same time, celebrities live in public, and might feel more pressure than the rest of us to live large. But wouldn't it be great if they didn't, and if they showcased their frugality, instead?
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